The Hong Kong Monetary Authority allotted RMB750 million in a government bond reopening on Nov. 12, with applications reaching 7.37 times the offer and an average accepted yield of 1.437%.
The HKMA conducted the auction on behalf of the Hong Kong Special Administrative Region Government for issue 05GB2912002, stock code 84596 (HKGB2.37 2912-R). The bond was first issued as a five-year instrument; this reopening left three years until its Dec. 10, 2029, maturity. It carries a 2.37% coupon.
The average accepted price was 102.80, implying an annualized yield of 1.437%. The lowest accepted price was 102.75 and corresponded to a 1.454% annualized yield. Across all bids, the average tender price was 102.51, equivalent to a 1.533% annualized yield. The pro-rata allocation ratio was about 34%.
The accepted yield was 1.7 basis points below the 1.454% average at the same bond’s July 23 reopening. The HKMA allotted RMB1 billion in July from RMB7.520 billion in applications, a 7.52 bid-to-cover ratio, compared with 7.37 this time. November’s applications totaled less than July’s, while the amount offered was RMB250 million lower. The bid-to-cover ratio compares applications with the amount offered.
The bond was reopened under Hong Kong’s Infrastructure Bond Programme. The Hong Kong Government Bonds programme says borrowing through the programme is credited to the Capital Works Reserve Fund, which finances government infrastructure projects. It describes the programme as a way to coordinate funding with major infrastructure work and support projects moving ahead sooner.
The tender notice limited bids to appointed Primary Dealers, with each application set at RMB50,000 or an integral multiple of that amount. Settlement is scheduled for Monday, Nov. 16.
